The short answer is yes; you can buy a house with physical money. No law prohibits a real estate transaction in cash. For the record, when people say they buy a house with cash, they mean they are buying a home without using a loan. Yes, technically, you can take a briefcase full of cash to the closing table and use it to buy a house.
There are no laws prohibiting a physical cash real estate transaction, just a few obstacles. There are several things that make buying a home with cash attractive, but the most basic thing is peace of mind. If you pay for a house in full, you own it entirely. That means there's no need for financing from a bank or other lender, no debt or mortgage bills every month.
You'll always have a place to live, and there's no risk of missing payments or foreclosure. Paying for a house with cash means buying a home without a mortgage. As a result, cash buyers don't need to factor in mortgage interest or closing costs when buying a new property. Buying a home with cash can save you money in the long run, but it can also exempt you from the advantages of a mortgage.
In short, if you have the money, it may be better to buy a house with cash. Buyers who pay cash tend to be viewed more favorably by realtors, and other buyers are more likely to insure the home they want. In many cases, paying for a home in cash also helps free you from mortgage payments, which non-cash homebuyers can struggle to pay in the next 15 to 30 years of their lives. Large cash withdrawals or deposits, both physical and electronic, often indicate potentially harmful activities for the government.
It may sound cool, but in practice, it's not exactly wise to wander around town with a small fortune in cash. But you can protect yourself and your investment if you really want to pay in cash and other alternatives that give you the opportunity to buy without committing all your money to a property. Paying for a house with cash is certainly possible if you have saved enough along the way and are sure that you will not put yourself in a difficult financial situation. Buying a home with cash only means that you are using your own funds to buy a house directly instead of financing it with a mortgage; in reality, you don't need to bring coins or paper notes for sale.
One important thing to consider as a cash buyer is that you won't have a lender to help you take care of property taxes and homeowner's insurance. There is nothing to insure the money if they leave the office after the deal and someone passes it. Technically, you can take those suitcases full of money to the closing table and use physical money to pay for your house. Writing a personal check is OK, as long as you have enough money to pay for the house, as well as the additional closing costs.
All that said, buying a home with cash can be a smart financial and personal decision for several reasons. If you're buying a home, especially in a hot market like this, you might hear that there are people making cash offers to buy properties in your area. Now that you know the ins and outs of making a cash offer, let's talk about how these offers can affect you as a home seller rather than a buyer. The first step to any solid cash offer is to gather your money and prove to sellers that you actually have it.
A larger down payment makes a buyer more attractive to lenders, gives them better interest rates, and can still give you a mortgage interest deduction on your taxes. Perhaps the biggest disadvantage is that once the money is out of your hands, you can't get it back or access it for other reasons. .